An investment philosophy is a coherent way of thinking about markets and how they function. It is the core set of beliefs we hold that dictate how we manage portfolios. Our investment strategies are the product of our investment philosophy.

Our investment philosophy is built on the experience of our people. The Investment Team at Alhambra has decades of experience in all types of markets and from many different perspectives. Our people share a passion for investing and markets, a thirst for knowledge and a fierce devotion to our clients. Our investment philosophy puts this experience and passion at the service of the firm’s clients to help them achieve their goals.

Here are the insights that guide our investment process:

  • Wealth preservation is necessary for wealth accumulation. Risk management is thus central to one’s investment program. The client’s unique circumstances, time horizon and tolerance for risk are primary considerations.
  • Markets move through valuation cycles.  Insights on valuation are derived from a thorough knowledge of history and an ongoing analysis of macroeconomic factors such as monetary and fiscal policy, fundamental valuation and market psychology.  Armed with experience and knowledge, our goal is to take prudent risks to earn a reasonable return over the entire economic cycle.
  • Investment advice must be unbiased and free of conflicts of interest. Incentives matter.
  • Investment time horizons should be long term. Long term investment returns for various asset classes can be fairly accurately predicted. Short term outcomes cannot.
  • Assets are often mis-priced. Markets are not inert objects but represent the interaction of fallible humans making emotional decisions. Mis-priced assets represent opportunities. Value investing is the process of identifying these mis-priced assets.
  • Reversion to the mean is a fact. Extremes do not persist indefinitely.
  • Costs have a large effect on investment performance.
  • Taxes have a large effect on investment performance.
  • Liquidity is rare when it is needed most.
  • Portfolios are not one size fits all; the portfolio must fit the client. 
  • There are only two investment methods that work – value and momentum. The best investments combine the two.